“It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we’re just taking advantage of that. So we can’t lose.” – Lou Jiwei, Chairman of China’s sovereign wealth fund
Translation: Oh no, not again.
I thought we were going to deal with the damage from the housing bubble, which came about because we didn’t deal with the dotcom bubble properly. Now I read this and I guess we need to gear up for the commodity bubble that will be coming up soon. Eventually, we’re going to run out of bubbles or the ability to create bubbles and the whole thing comes crashing down that much harder.
Get ready for more Minsky Moments in the future. And if you don’t know what one is, fire up the Wikipedia and add something to this discussion when you’re familiar with the concept.